Three related things are happening to Australian solar households right now, and the media tends to mash them together under "sun tax" without explaining that they're different mechanisms with different effects. If you have solar, or you're about to buy it, all three affect how much value you get from your system.
Feed-in rates, tariff proposals, rebate amounts and bill-saving figures shown here are estimates or illustrations unless explicitly described as a published rule. Confirm current terms with your retailer and network.
Three different things, often confused
1. Feed-in tariffs going down
This has been happening for years. In Victoria, the minimum feed-in tariff for 2025-26 is estimated at around 4.6 cents per kWh, down from over 11 cents a few years ago. This isn't a "tax," it's the price your retailer pays you for the solar power you send back to the grid, and it's been dropping because the grid is flooded with midday solar. The less they pay you per kWh exported, the less financial value you get from exporting, and the more value you get from using or storing your own power instead.
2. Export limits set by your network
Most Victorian distribution networks (Powercor, CitiPower, Jemena, AusNet, United Energy) now cap how much power your inverter can send back to the grid, typically at 5kW for a single-phase connection and 5 to 10kW for three-phase. If your 10kW system is generating 8kW and your house is using 3kW, the remaining 5kW is exactly at a typical single-phase export limit, and anything above that gets curtailed. The system doesn't switch off, the inverter just throttles back its export. But you lose generation you would otherwise have been paid for, however small the feed-in tariff.
3. Two-way export tariffs (the actual "sun tax")
This is the new one, and the one generating the backlash. In NSW, Ausgrid became the first major network to introduce mandatory two-way export pricing in FY2026. This means solar households are charged per kWh for exporting to the grid during certain hours (typically 10am to 3pm, when the grid is most saturated with solar), and rewarded at a higher rate for exporting during the evening peak (4pm to 9pm). Ausgrid's proposed rates are estimates: 1.23 cents/kWh to export between 10am and 3pm, with a 200 kWh/month free allowance, and an estimated reward of 3.85 cents/kWh for exports between 4pm and 9pm.
Victoria hasn't introduced mandatory two-way export pricing yet. But the Australian Energy Market Commission (AEMC) finalised the rules that allow it, and other networks are watching. It's a question of when, not if, for most of the NEM.
What this means for a Melbourne solar household right now
In Victoria in September 2026, you're affected by #1 (low feed-in tariffs) and #2 (export limits) but not yet by #3 (two-way export charges). The practical effect is the same direction: exporting solar for a few cents per kWh is increasingly poor value, and using or storing that power yourself is increasingly better value. The financial case for a battery has shifted from "it's a luxury" to "it's starting to make the numbers work," especially with the Cheaper Home Batteries Program discount applied.
Illustrative Melbourne-west example: a 10kW system with a 5kW export limit
Illustrative estimate only: assume a 10kW system generates ~40 kWh on a good Melbourne day and the home uses ~12 kWh in daylight hours. That leaves an estimated ~28 kWh of surplus. With a 5kW export limit, some surplus during peak sun may be curtailed; for this example, assume an estimated 20 kWh is exported and ~8 kWh is curtailed. Actual generation, household use and permitted export vary by property and conditions.
At an estimated 4.6c/kWh feed-in tariff, exporting an estimated 20 kWh would earn an estimated 92 cents. Any curtailed energy earns no export credit.
With a battery, some otherwise-curtailed energy may be stored for later use instead of buying grid power. The value depends on the home's actual tariff and losses; any tariff or bill-saving calculation here is an estimate, not a promise.
What you can actually do about it
Load-shift first, it's free. Run your dishwasher, washing machine, dryer, pool pump, and hot water system during peak solar hours (10am to 2pm) instead of the evening. Many of these can be put on a timer for nothing. This is the cheapest way to use more of your own solar and export less of it into a grid that barely pays for it.
A battery is the more complete solution. It stores the excess that would otherwise be curtailed or exported for a few cents, and lets you use it in the evening when grid power costs an estimated 25 to 35 cents/kWh. With the federal rebate providing an estimated roughly 30% discount off the sticker price, the payback maths has shifted meaningfully in 2026 compared to even two years ago. If you already have solar, our retrofit guide covers the options for adding a battery without touching your existing panels.
Ask about your specific export limit at quote stage. A good installer will check your network's current export rules for your specific address and design the system around them, not discover them after installation. If you're on a 5kW single-phase limit and you're quoted a 13kW system without anyone mentioning how the export limit affects your return, ask why.
Explore the numbers for your home
Estimate a battery size and payback, then ask us to review your home's requirements and prepare a quote.
Common questions
All rebate amounts, tariff rates and bill-saving figures in this guide are estimates unless identified as a published rule or proposal. This guide reflects Victorian and national export rules as at September 2026, cross-checked against current AEMC rulings, Victorian distributor guidelines, and Ausgrid's published two-way tariff structure. Reviewed by Gagandeep Gill before publishing. Network rules and tariffs change; confirm current details with us at quote stage.